One of Australia’s most experienced legal advisors to the hotels and hospitality industry says he sees the sector’s real estate outlook bouncing back quickly after last year’s bruising effects of the COVID pandemic, despite the current slew of lockdowns across the country.
“By and large, we’re seeing that hotel asset buyers are prepared to take a long view on the hotel industry,” says Duane Keighran, managing director of newly-established law firm, Keighran Legal + Advisory.
“Some parties hold different views in relation to the valuation of projects, which is becoming hard to gauge with the sporadic lockdowns, but the overall outlook is definitely assisted by the build up of undeployed capital which is trying to find a home in quality assets. Competition on the buy side is high, and growing daily.”
Keighran Legal + Advisory advises hotel operators, owners, real estate investors and developers in relation to buy and sell side mandates, as well as on the management and development of hotel and real estate projects.
Providing a whole-of-cycle service, the firm also advises on environment, planning, construction and dispute resolution matters, and consciously focuses on providing commercially pragmatic legal solutions alongside deep industry knowledge.
“We established Keighran Legal + Advisory in response to our clients requiring a more focused approach to the provision of legal + advisory services. In the post-COVID environment, now more than ever clients are interested in finding a commercially sensible resolution to legal issues – and without delay, and due to our deep understanding of the industry, we are able to provide that for them.”
Other market changes seen by Mr Keighran and his team of experienced lawyers include seeing greater traction for new development mandates after the initial shock caused by the 2020 COVID situation.
“We are working on some of the new management deals in the market and have seen some interesting shifts start to take place,” says Mr Keighran.
“Some owners are attempting to drive harder bargains with operators on certain commercial terms relating to overall control, guarantees and income support mechanisms given what we have all experienced with the COVID situation.
“But, regardless of the perceived change in dynamics following the pandemic, there are some items that operators won’t be prepared to budge on. Our role on these mandates still involves finding some common ground between the parties to ensure that an owner has sufficient oversight of their operational asset, without overly burdening the operation (and profitability) of the hotel.”
Mr Keighran also notes that there is some ground to be made up due to the pandemic, and the time to act is now.
“With a construction timeline it will take 2-3 years to get the hotel to market, which should align with when we will be well and truly open to international travellers again,” he says.
“We didn’t have enough quality stock to cater for travellers pre-COVID, so it’s obviously a great time to bring some new projects to market to cater for that demand that will arrive when our skies open.”